WFE has commissioned for IOMA an update of the 2010 TABB Group report on OTC and on-exchange derivatives developments. The mandate includes a more global perspective than two years ago. Are developed and developing derivatives marketplaces going down separate paths? Should OTC be brought into the exchange and clearinghouse space? Is this happening by itself? How expensive is adding security to the marketplace? Is the plus needed only repository services, and is this enough to reduce risk?”

Nationalistic overtones have entered the business conversation as cross-border bids have been stopped. What is the logic in exchanges being so special as to have mergers blocked, yet not so special that the authorities fragment the marketplace by imposing unfair competition? Whether this is the result of the financial crisis and government’s desire to keep a grip on markets, or from competitive and commercial pressures, what external business development opportunities remain for exchanges?

In Europe and elsewhere, parties with vested interest in the OTC markets were vocal in opposing mergers. If OTC markets and exchanges do not compete as the Commission maintained, were these objections pertinent? If they do compete, were these objections fair?

Nicolas Bertrand, Head of Equity and Derivatives Markets, London Stock Exchange Group

15:30 – 17:00

Speed and HFTs, market stability and the market liquidity problem

Trading conditions continue to change: the Volker Rule, bank capital requirements … where will we find trading customers? What do the authorities think about today’s regulated trading environment as they address the need to restore confidence in more liquid markets grounded in a more stable environment?

Tuesday, 17 April 2012

09:00 – 10:15

SEFs and OTFs

Exchanges and others are creating their own SEFs and OTFs. What does this mean for our industry’s business development? What might happen to price discovery / fragmentation? Is this likely to play out differently if such entities spread beyond developed markets, and if so would that be due to regulation and / or other factors? How differently might this play out in derivatives markets rather than the cash markets when similar structures were introduced there?

This session will combine short presentations with around-the-room, off-the-record questions and answers.

10:45 – 12:00

Commodities

Hard and soft raw materials segments have been major drivers of the futures business, and they were indeed at the very origin of what we now do. With the markets’ change in scale and volatility, questions arise about “speculation” and the role it might be playing together with underlying global economic growth pushing up demand. The prices of many basic goods are at new highs.

To counter this often negative public image, what can exchanges say that they have contributed to stabilizing the markets through the transparency and liquidity they provide? How do we determine when it is necessary to affect market price movements by changing margin or price trading limits? Why is what exchanges do better for business and society than if regulated marketplaces for these goods did not exist? And where does the commodities futures business go from here?

Moderator: Will Acworth, Editor, Futures Industry

Speakers:Wu Keli, Vice President, Zhengzhou Commodities Exchange

Sergio Gullo, Chief Representative for EMEA, BM&FBOVESPA

Robert D. Ray, Managing Director International Products and Services, CME Group London

13:30-14:30

Clearinghouse competitive landscape

Questions about vertical and horizontal structures seem to be fading, but what in fact is the competitive landscape for clearers as post-trade’s infrastructure and commercial significance come ever more to the foreground of business planning and public policy questions? How does this differ across the world?

How “bullet-proof” do clearinghouses need to be in order to avoid “too big to fail” labeling? How much will bullet-proofing raise the cost of clearing? To what extent should a clearinghouse’s book be opened, in particular when operating CCP services, and who should decide and manage? What if a clearinghouse fails – how would losses be allocated in such an extreme event? What about contagion?

Moderator: Marcus Zickwolff, EACH Chairman and Executive Director, Eurex Group, Head of Trading and Clearing System Design Department.